The Neil Lyon Group presents the Santa Fe Market Update, for the 3rd quarter of 2014
The Neil Lyon Group is again pleased to send to you the Santa Fe Market Update for the 3rd quarter. You can easily access the Market Update by using the link below.
When you read Gregg Antonsen’s comments on page 2 of the Market Update, you’ll see that he labels our market as “stable”. With many markets around the US experiencing significant increases or decreases in activity, Santa Fe is in a cycle with few highs or lows. What I consider to be the key indicator of our market’s health, the year-to-date number of sales as compared to last year, shows very little change. There have been 74 sales this year-to-date in the $1,000,000+ category. Compare this to 70 for last year. In the $750,000 to $1,000,000 category, the 95 sales this year-to-date is identical to last year’s sales.
What is most curious is the increase in showing activity that we saw during the period when the financial markets were getting pummeled. It didn’t benefit all of our listed properties, but the change was palpable. In past years, we saw increases in showing and buying activity as the markets improved. If the Dow was up in a significant way, we saw an immediate increase in buyer interest. We used to see this on a weekly or even daily basis. To our surprise, we saw a clear uncoupling of market advances and buyer activity during the most recent bull market. And equally unexpected was the new increase in activity as the markets got bashed. No complaints, but it is baffling nevertheless.
Another observation of note: since the 2009 decrease in the median sale price (which was a -10% adjustment), we have seen the median price change very little. In fact the 2014 median price of $293,000 is virtually unchanged (-1%) as compared to the 2009 median price of $297,000. It supports the notion that our market has proven to be very non-volatile in the most recent years.
What has been so attractive to buyers in the past is still attractive today. Santa Fe remains a unique, vibrant and sophisticated community, in spite of our small size and small-town feel. The unexpected precipitation that we received this summer and early fall has been a wonderful gift and the results of it are on full display. Home values are only marginally above where they were a decade ago (3%), interest rates remain very low and lender guidelines are loosening up. The inventory of available homes is up modestly in all price categories. For those who have dreamed of owning a home in our wonderful community, it is really a great time to jump in. We are seeing more activity reflecting this very positive situation for buyers.
My thanks for reading this quarter’s Market Update and I hope you have enjoyed my personal analysis of the contained data about our local real estate market and the contributions made by Vanessa and Michaelene. If we can assist you in any way, please let us know.
A message from Vanessa Rios y Valles:
At the end of the 2nd quarter I presented to our readers showing activity statistics for all Sotheby’s listings across a spectrum of price ranges. While informative, things always get more interesting when we are able to compare the most recent quarter’s showing activity to the prior quarter, so that we are able to put together a picture of how showing activity is progressing as we work through the year. As you can see by the graph below, showing activity within our company increased in every price category with the majority of activity taking place in the under $1M range.
However, while it’s always positive to have more showings, how did the 2nd and 3rd quarters compare in terms of sales? Below is a graph that compares Santa Fe County’s 2nd and 3rd quarter residential sales in these same price ranges. As you can see, although showings seem to be up in all price ranges, sales have gone DOWN in price ranges above 1.5 million dollars.
It seems counterintuitive, but that’s what the market experienced. I, for one, will be interested to see what the 4th quarter brings as far as showing activity within our company and how that compares with Santa Fe County sales. As usual, if you would like to discuss showing activity as it relates to YOUR home, feel free to give me call.
A message from Michaelene Sargent:
Inspections: The General Home Inspection
In the coming newsletters, I will be focusing on different aspects of a typical real estate transaction, so that the many steps that may seem complicated are more fully explained and understood.
In this issue of our Market Update, I am focusing on the home inspection process.
The general home inspection is not about what the worth of a home or about cosmetic or aesthetic issues like a poorly kept yard. Its primary purpose is to undercover the substantive issues that exist with the property. Inspectors look at systems and structures that, if failing or have failed, can cost significant money to repair or replace. Some of the areas included in the inspector’s checklist are: roofs, plumbing, electrical, slab or foundation, conditions that could be conducive to dampness and/or mold, appliances and evidence of pests. Often times an inspector may note issues that could be the basis for additional inspections by specialists. These areas could include a mold test, a pest inspection, a roofer inspecting the roof or an electrician or plumber further and more thoroughly inspecting those systems. A general inspection may also include a radon test, but that would be an add-on to the general inspection.
It is important to know that an inspection is not a guarantee that the inspector will catch every possible issue with the property. With a typical inspection taking 3-4 hours, the scope is limited and only what can be physically observed. There may be things going on behind walls that an inspector cannot identify. And there may be conditions that an inspector identifies as concerning that end up being false concerns. Plus, different aspects of a property such as an irrigation system and a swimming pool or outdoor spa are outside the scope of a general inspection, and will need to be inspected by professionals skilled in those areas.
As the seller of a property, a proactive approach is to have a pre-listing general inspection. This will give the seller ample time to make repairs and have work completed so that the property will have a “clean bill of health”, so to speak. A property that has been well maintained and conscientiously cared-for will simply sell faster and at a higher price.
From the buyer’s perspective, the need for a general inspection cannot be stressed enough. It is worth every dollar that the buyer will pay for a fuller understanding of what they are purchasing. And the results of the inspection-related due diligence may lead to an important renegotiation of the price being paid. This will be important if significant issues not previous known are uncovered in this process.